Green Energy Plan Criticized

Oct 03, 2008

The Miami Herald

In a proposal that might decide the future of green power in Florida for decades, the staff of the Public Service Commission recommended Thursday that electric utilities be required to provide 20 percent of their power from renewable sources by the year 2041.

The proposed rule was immediately decried by environmentalists as being too weak. "This shows they just don't get it about the seriousness of what's involved," said Jerry Karnas, a Florida director for the Environmental Defense Fund. "Energy independence, climate change - these are matters that just won't wait."

The staff's recommendation starts a battle that could be going on for months between environmentalists, utilities, politicians and consumer advocates.

For consumers, the issue is how much they'll be paying for renewables in their monthly bills. For environmentalists, it's stopping global warming.

For the growing number of renewable energy companies, it's the prospect of hundreds of millions of dollars in potential revenue.

The PSC is expected to discuss the proposal during a hearing later this month. The commissioners' decision, probably after more hearings, will be sent to the Legislature, which has final approval.

Karnas pointed out Gov. Charlie Crist has said "multiple times" that he wanted to shoot for 20 percent by 2020. Solar power firms and others creating renewable energy have also lobbied for a 2020 benchmark.

A key question is how much renewables should cost consumers. The staff recommends a cap of 2 percent of a utility's annual revenue. That would work out to about $2.40 a month added to the typical homeowner's bill, the PSC staff estimated.

Karnas called the cap "extremely low, considering they just asked for

8 percent for added fuel costs and they're already charging for nuclear [plants]" that won't be finished for a decade.

Mike Twomey, a consumer advocate, said costs are certainly important to many customers. "I told the PSC that it should be elected officials who make the decision about how much we spend on renewables. And right now we don't know how much those renewables are going to cost."

The staff draft recommends the commission require utilities to generate 5 percent of their power from renewables, such as wind and solar, by 2017, 10 percent by 2025 and 15 percent by 2033.

The requirements are considerably stiffer than the staff's original proposal, a so-called "strawman draft," which suggested 2 percent by 2010,

3.75 percent by 2017, 6 percent by 2025 and 20 percent by 2050.

Environmentalists had roundly criticized that first proposal as being far too lenient, and Karnas said the latest proposal is hardly any improvement. "This is a snail's step forward. We'd still have the weakest [standard] in the entire nation. The first strawman was so egregiously bad that they had no where to go but up."

Florida Power & Light has said it could exceed the standards of the strawman proposal if it is allowed to include nuclear power as a renewable -- a request environmentalists decried and the staff rejected.

Following the release of the staff recommendation, FPL spokesman Mayco

Villafana issued a statement: "We are in full support of the governor's climate change initiatives, including the creation of a renewable portfolio standard for Florida. FPL has made the most significant commitment to renewable energy of any utility in the state, and we believe the right approach going forward is to encourage utilities to build more renewable energy projects."

When the Legislature asked earlier this year for the PSC to come up with a proposal for a renewable energy portfolio standard, it noted regulators should seek a balance between environmental concerns and costs.

In its recommendation Thursday, the staff said its proposal should be "contingent on the analysis of the technical and economic potential" on renewables being undertaken by Navigant Consulting, which has been hired to provide levelized costs of how much solar, wind, biomass and other forms of energy cost -- costs that will ultimately be passed along to consumers.

The PSC staff noted that the governor's Energy Office and staff are working closely with Navigant to come up with the estimates, which are not expected for some weeks.

Renewables account for 1.9 percent of the state's power, according to federal data. Virtually all of that comes from biomass plants burning wood or wood wastes and landfill gases, which is generally considered a cheaper way of providing renewables.

The staff recommendation seeks a minimum of 25 percent of all renewables to be solar and wind. In capping costs, it proposed that three-fourths of utilities' payments go to solar and wind, and 25 percent to other renewables.

Twomey, the consumer advocate, said that was wrong. "That's a carve-out, pure and simple. Carve-outs favor special interests. If they'reinterested in reducing greenhouse gases, they should choose the cheapest ways of doing that -- whether it be burning garbage or whatever. There are real concerns about how expensive solar and wind are."

Another battle will focus on renewable energy credits in the state, which could potentially mean hundreds of millions of dollars to companies producing green power. The PSC staff recommends setting up a credit market. FPL encouraged the PSC to focus more on projects, rather than on the credits.